Ministry urges assessment over proposal to lift the ceiling prices of air tickets

Tuesday, May 09, 2023 08:34

Passengers at self check-in kiosks of a domestic airline at the Noi Bai International Airport. Lifting ceiling airfare must be studied carefully. — VNA/VNS Photo Huy Hung

The Ministry of Finance urged the Ministry of Transport to have detailed evaluations about the proposal of lifting the ceiling price for air tickets.

In Document No. 168/QLG-CNTD, the finance ministry recently sent to the Viet Nam Civil Aviation Authority of Viet Nam, Viet Nam Register, departments of finance and transport under the Ministry of Transport with regard to the proposal of lifting the ceiling price, the finance ministry said that civil aviation services and airfares were under the management of the Ministry of Transport.

According to the finance ministry’s Price Management Department, during the compilation of the amended Law on Price, the department receive the proposal of removing domestic airfare ceiling from Viet Nam Aviation Business Association, Vietnam Airlines and Bamboo Airways.

The department said that the established Law on Civil Aviation stipulates that airlines decide on prices of domestic air transportation services within the framework set by the Ministry of Transport and was in charge of declaring prices with the Ministry of Transport.

Accordingly, the Ministry of Finance urged the Ministry of Transport to have detailed proposals coupled with assessments of the impacts of lifting the ceiling prices of domestic air tickets.

At the meeting about the draft amended Law on Price in late April, the proposal of lifting the domestic ceiling price was also raised.

Under the current bracket, airfares were capped at VND1.6 million for routes below 500km and playing an important role in socio-economic development, VND1.7 million for other routes below 500km, VND2.2 million for routes of between 500-800km, VND2.79 million for routes of between 850-1,000km, VND3.2 million for 1,000-1,280km and VND3.75 million for routes over 1,280km.

These prices did not include value added tax and airport services fees.

Mixed opinions have arisen from the proposal of lifting the ceiling prices.

Some said that the ceiling prices should be kept as a base for the management agency to regulate the market and ensure the rights of customers.

Meanwhile, some said that the existence of ceiling prices was inhibiting the growth of the domestic air transport market.

Luong Hoai Nam, an industry insider, said that airline ticket prices should be decided based on the market economy principle. The ceiling price was stealing the opportunity of improving the financial capacity of carriers.

Tran Tho Dat, chairman of the Academic Board of the National Economics University, said that currently, just a few countries imposed ceiling and floor prices for airfares. Removing the ceiling prices was necessary but an appropriate pricing mechanism should be tabled instead to ensure healthy competition, transparency and the stable, long-term and sustainable development of the aviation market as well as the rights of passengers. — VNS

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